5-year fixed rate mortgages have been the top recommendation from brokers to landlords, according to research from Landbay.
The study found 83% of brokers were advising fixed-rate options, with 42% pushing 5-year fixed rates and 38% favouring 2-year fixed rates.
Only 3% suggested 10-year fixed deals, while 17% recommended trackers.
Rob Stanton, sales and distribution director at Landbay, said: “Brokers’ preference for 5-year fixed mortgages reflects their focus on providing landlords with stability in a volatile market.
“With 42% of brokers favouring 5-year fixed deals, these products are still outpacing 2-year fixes and tracker products.
“Landlords are navigating choppy regulatory waters and significant economic headwinds.
“It’s perfectly sensible to lock into certainty under the circumstances. It’s predictability over flexibility.”
Stanton added: “There has been a shift in the BTL market’s preference for short-term deals and fixes. In the second quarter of 2022, 83% of BTL landlords told us they were looking at 5-year or 10-year fixes.
“Only one in six – 17% – were interested in trackers or short-term fixes. Most of the industry was looking to shield against rate hikes.
“Compare that to today with 55% of brokers saying trackers and short-term 2-year fixes are their go-to mortgage recommendation.”
He said: “In that context, it’s a completely different story. Brokers’ recommendations suggest a strategic shift away from surety and predictability, towards affordability and profitability.
“Given markets are currently forecasting a further three 0.25 percentage point cuts before Christmas – which would mean interest rates reaching 3.5 per cent by the end of the year – they’re not wrong to be moving in this sort of direction.”
